Manufacturers across Southeast Asia are displaying the most pessimistic outlook on future growth since the height of the COVID-19 pandemic, according to the latest industry survey. Despite a modest uptick in manufacturing activity last month, widespread concerns about export prospects and supply chain disruptions have tempered optimism among industry leaders.
The decline in confidence is largely attributed to prolonged tariff rollouts initiated during the previous U.S. administration under Donald Trump, which continue to impact trade flows and increase costs for manufacturers in the region. Many firms report that ongoing trade tensions and tariff uncertainties hinder their expansion plans and investment strategies.
Economists note that while factory activity improved slightly last month, the underlying sentiment remains cautious. Southeast Asia, a manufacturing hub for electronics, textiles, and automotive parts, remains vulnerable to external shocks, despite a rebound in some sectors. Policymakers are now urged to focus on stabilizing trade relations and supporting resilient supply chains to foster a more optimistic outlook moving forward.
Overall, the survey underscores a challenging environment for Southeast Asian manufacturers, with lingering effects from past trade policies marking the lowest confidence levels since the pandemic’s early days. Industry stakeholders are closely watching upcoming trade negotiations and policy decisions that could influence recovery prospects in the region.